Home values in the U.S. increased an average of almost 12% over the last 12 months, according to Zillow.
But, in some markets – like Austin, TX – we saw appreciation of over 25%!
So – what does this mean for homeowners?
If they have an FHA loan, they should explore eliminating their mortgage insurance by refinancing into a conventional loan.
If they have Private Mortgage Insurance (PMI) – they should refinance into a new mortgage with no PMI.
If they have cash out needs for anything – tuition, remodels, debt consolidation, etc. – they should refinance to take advantage of what remains the lowest cost funds available.
If they have investment opportunities of any kind (including additional real estate purchases), they should tap into their home to employ the lowest cost of capital available – like so many of their neighbors are already doing.
Homeowners might also pull cash out to simply ensure they have enough cash liquidity on hand to meet their monthly expenses for at least 12 months and/or to cover emergencies of all sorts.
So yes, there is a theme here. 😊
Homeowners everywhere should still seriously consider refinancing for all of the reasons set out above, as rates still remain almost 0.25% LOWER than where they were last year this time (according to Freddie Mac).
One more thing.
Homeowners might act soon too before inflation sets in and we see a repeat of the 1970s.
I’m not referring to the disco, bell bottoms and leisure suits either (although I’d love to see them return), but to 15% interest rates!
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